Ofgem's RIIO2 regulatory framework - currently out for consultation - will shape - and endorse many tens of billions of new network investment in the period from 2020–28. At this initial stage in designing the RIIO2 framework, Sustainability First is proposing that serious thought be given by Ofgem, the network companies and others with an interest...

The Obama administration announced plans on Monday, 2 June, to cut US carbon emissions. These plans give an extremely important new and much-needed lead in an area where the US has in the past been reluctant to move forward. The announcement by the US Environmental Protection Agency will aim to cut carbon emissions from existing and new power stations and improve energy efficiency.The EPA says that the Clean Power Plan will cut carbon emissions from the US power sector by 20% by 2030, cut pollution and, as a result, improve health, and reduce energy bills by about 8% by increasing energy efficiency and reducing energy demand.While these aims are still modest compared with actions being taken in Europe, for example, they are a major step forward and will give a powerful lead at the climate summit in September 2014 in New York and COP21 in Paris in 2015.But concentrating on emissions reduction is only part of the story. Without action to limit production of fossil fuels, we shall be no further forward. We have seen what the impact of shale gas in the US had on US coal prices and the resulting increase in coal burn in Europe leading to higher carbon emissions in the UK and elsewhere in 2012. Reducing coal burn in the US without reducing US coal extraction will have the same impact on coal prices. And, if the coal is not burnt in Europe, because of closing coal-fired power stations, it will go elsewhere. The availability of cheap coal will make it politically much more difficult for countries not already committed to reducing their carbon emissions to do so.Cutting back on fossil fuel production is far from easy for any country. Economies and jobs depend on it. But it is simple Economics 101 that if demand is reduced while production is not curtailed, prices will go down. In the absence of global agreement to reduce carbon emissions, cheaper coal will be just too tempting to some countries. Some solution must be found.Bard Halstad has suggested that countries committed to emissions reduction should buy up fossil fuel deposits to leave them in the ground. This may not work, but at least he has focused on the problem and started a debate.Two aspects of what are needed are clear, however. Help must be given to those regions that currently depend on coal-mining to assist them through the transition. And, as the Commons’ Energy and Climate Change Committee recommended last month, we need to fast track decisions on carbon capture and storage.